Business failures significantly reduced in automotive industry

Business failures amongst motor traders fell by 30.3 per cent during April, May and June in 2007, according to Experian, the global information solutions company.

This is the highest fall in failures that the automotive industry has seen during any quarter since Experian started collating the information in 1998.

During the second quarter of 2007, 53 motor traders went bust compared to 76 during the same period last year. Business failures throughout all sectors in the UK fell by 4.9 per cent, but motor traders saw the fifth highest drop in businesses failing.

Kirk Fletcher, Managing Director of Experian’s Automotive division, said: “This is a complete turnaround after the automotive industry saw the biggest increase in business failures ever experienced during quarter one in 2006 (when compared to quarter one 2005).

“The picture began to look more positive as the number of motor traders failing started falling each quarter after the second quarter of 2006. However, the general feeling amongst traders is that 2007 so far has been difficult. Business confidence among UK firms in July was recorded at its lowest level since February 2006.

“Furthermore, consumers are visiting the showrooms, but sales are getting harder to secure. Consumer confidence fell for the first time in six months during June, as people braced themselves for higher interest rates. People with mortgages and other debts are likely to struggle and this will have an impact on the car market. Those that have managed to avoid becoming another statistic in the insolvency report during quarter two may not be so lucky next time.

“There are many companies out there to help dealers pull themselves out of this situation, with services ranging from helping dealers manage relationships with the customers they already have more profitably, cutting out unnecessary costs, protecting themselves from fraudsters and prosecution, making themselves stand out in the right arenas and reaching the customers suitable to their stock. Experian’s Automotive division has all this under one roof, enabling dealers to target, acquire and manage customer relationships more effectively and efficiently both on and offline.”